Commerce provides employment and tax revenue in Finland – however, domestic specialty goods trade is affected by the government’s tax policy  

Commerce employs around 280,000 people in Finland. Among under-25-year-olds in working life, as many as one in five work in a commerce-sector company. Commerce serves the national economy, from healthcare to construction and from industry to consumers, and thus generates well-being throughout Finland. It is very important to society how the commerce sector fares.

”The significance of commerce exceeds the size of the sector when one includes indirect impacts in other sectors. With its daily operations and investments, commerce creates jobs and well-being indirectly through a wide range of other sectors in Finland”, says Jaana Kurjenoja, Chief Economist of the Finnish Commerce Federation.

In 2023, commerce generated VAT revenue totalling around EUR 10,698 million, or around 50 per cent of total VAT revenue. Although the VAT revenue generated by commerce’s domestic sales is already up to half of total VAT revenue in Finland, it declined by more than two per cent last year. The same trend has continued this year. In August, just before the tightening of VAT, the cumulative VAT revenue of commerce was 2.4 per cent lower than in the corresponding period last year.

The tightening of VAT will primarily affect specialty goods trade, which is already affected by the meager development of purchasing power and foreign ultra-fast e-commerce.

“Tax policy has further weakened the international competitiveness of domestic specialty goods and household goods trade, and the tax increases will not be reflected in the tax revenue as the government has hoped,” predicts Kurjenoja.

Commerce pays a considerable share of corporate taxes 

Commerce has responded to domestic and foreign competition by, for example, streamlining, digitalising and automating its operations. Digitalisation and automation, among other things, have increased investments made by commerce.

“The size and importance of commerce are often not recognised, although the economic growth impacts of domestic commerce extend to almost all sectors and industries. Therefore, there is also often a lack of awareness of how orders or investments made by commerce create new innovations and new types of activities in other sectors,” Kurjenoja says.

In 2023, of all sectors, commerce paid the third highest amount of corporate taxes in Finland, EUR 957 million, or 12.4 per cent of the total amount. In the same year, the financial and insurance sector paid the most corporate taxes, amounting to EUR 1,665 million, representing 21.5 per cent of total corporate tax revenue.

Commerce provides employment and tax revenue in Finland. In 2023, the income tax revenue from the commerce sector amounted to EUR 2,428 million, or 6.8 per cent of total income tax revenue. In the same year, the largest amount of income tax revenue came from public administration: EUR 14,000 million, which is 39.1 per cent of total income tax revenue.

However, the Finnish Commerce Federation considers that the purchasing power of consumers should be supported by a long-term easing of income taxation at all income levels.

Further information: Jaana Kurjenoja, Chief Economist, tel. +358 40 820 5378, jaana.kurjenoja(at)kauppa.fi